What Can Happen When Lawyers Over Delegate e-Discovery Preservation and Search to a Client, and Three Kinds of “Ethically Challenged” Lawyers: “Slimy Weasels,” “Gutless,” and “Clueless”

September 21, 2014
Sergeant Schultz of Hogan's Heros

“I see nothing, NOTHING!” Sergeant Schultz

Bad things tend to happen when lawyers delegate e-discovery responsibility to their clients. As all informed lawyers know, lawyers have a duty to actively supervise their client’s preservation. They cannot just turn a blind eye; just send out written notices and forget it. Lawyers have an even higher duty to manage discovery, including search and production of electronic evidence. They cannot just turn e-discovery over to a client and then sign the response to the request for production. The only possible exception proves the rule. If a client has in-house legal counsel, and if they appear of record in the case, and if the in-house counsel signs the discovery response, then, and only then, is outside counsel (somewhat) off the hook. Then they can lay back, a little bit, but, trust me, this almost never happens.

To see a few of the bad things that can happen when lawyers over delegate e-discovery, you have only to look at a new district court opinion in Ohio. Brown v. Tellermate Holdings Ltd., No. 2:11-cv-1122 (S.D. Ohio July 1, 2014) (2014 WL 2987051 ). Severe sanctions were entered against the defendant because its lawyers were too laid back. The attorneys were personally sanctioned too, and ordered to pay the other side’s associated fees and costs.

The attorneys were sanctioned because they did not follow one of the cardinal rules of attorney-client relations in e-discovery, the one I call the Ronald Reagan Rule, as it is based on his famous remark concerning the nuclear arms treaty with the USSR: Trust but verify

The sanctioned attorneys in Brown trusted their client’s representations to them that they had fully preserved, that they had searched for the evidence. Do not get me wrong. There is nothing wrong with trusting your client, and that is not why they were sanctioned. They were sanctioned because they failed to go on to verify. Instead, they just accepted everything they were told with an uncritical eye. According to the author of the Brown opinion, U.S. Magistrate Judge Terence P. Kemp:

… significant problems arose in this case for one overriding reason: counsel fell far short of their obligation to examine critically the information which Tellermate [their client] gave them about the existence and availability of documents requested by the Browns. As a result, they did not produce documents in a timely fashion, made unfounded arguments about their ability and obligation to do so, caused the Browns to file discovery motions to address these issues, and, eventually, produced a key set of documents which were never subject to proper preservation. The question here is not whether this all occurred – clearly, it did – but why it occurred, and what, in fairness, the Court needs to do to address the situation which Tellermate and its attorneys have created.

Id. at pgs. 2-3 (emphasis added).

What is the Worst Kind of Lawyer?

slimy_weasel3Taking reasonable steps to verify can be a sticky situation for some lawyers. This is especially true for ethically challenged lawyers. In my experience lawyers like this generally come in three different varieties, all repugnant. Sometimes the lawyers just do not care about ethics. They are the slimy weasels among us. They can be more difficult to detect than you might think. They sometimes talk the talk, but never walk it, especially when the judge is not looking, or they think they can get away with it. I have run into many slimy weasel lawyers over the years, but still, I like to think they are rare.

cowardOther lawyers actually care about ethics. They know what they are doing is probably wrong, and it bothers them, at least somewhat. They understand their ethical duties, they also understand Rule 26(g), Federal Rules of Civil Procedure, but they just do not have the guts to fulfill their duties. They know its is wrong to simply trust the client’s response of no, we do not have that, but they do it anyway. They are gutless lawyers.

Often the gutless suffer from a combination of weak moral fibre and pocketbook pressures. They lack the economic independence to do the right thing. This is especially true in smaller law firms that are dependent on only a few clients to survive, or in siloed lawyers in a big firm without proper management. Such gutless lawyers may succumb to client pressures to save on fees and just let the client handle e-discovery. I have some empathy for such cowardly lawyers, but no respect. They often are very successful; almost as successful as the slimy weasels types that do not care at all about ethics.

ScarecrowThere is a third kind of lawyer, the ones who do not even know that they have a personal duty as an officer of the court to supervise discovery. They do not know that they have a personal duty in litigation to make reasonable, good faith efforts to try to ensure that evidence is properly preserved and produced. They are clueless lawyers. There are way too many of these brainless scarecrows in our profession.

I do not know which attorneys are worse. The clueless ones who are blissfully ignorant and do not even know that they are breaking bad by total reliance on their clients? Or the ones who know and do it anyway? Among the ones who know better, I am not sure who is worse either. Is it the slimy weasels who put all ethics aside when it comes to discovery, and are not too troubled about it. Or, is it the gutless lawyers, who know better, and do it anyway out of weak moral fortitude, usually amplified by economic pressures. All three of these lawyer types are dangerous, not only to themselves, and their clients, but to the whole legal system. So what do you think? Please fill out the online poll below and tell us which kind of lawyer you think is the worst.


I will not tell you how I voted, but I will share my personal message to each of the three types. There are not many slimy weasels who read my blog, but I suspect there may be a few. Be warned. I do not care how powerful and protected you think you are. If I sniff you out, I will come after you. I fear you not. I will expose you and show no mercy. I will defeat you. But, after the hearing, I will share a drink with some of you. Others I will avoid like the plague. Evil comes in many flavors and degrees too. Some slimy weasel lawyers are charming social engineers, and not all bad. The admissions they sometimes make to try to gain your trust can be especially interesting. I protect the confidentiality of their off-the-record comments, even though I know they would never protect mine. Those are the rules of the road in dancing with the devil.


As to the gutless, and I am pretty sure that a few of my readers fall into that category, although not many. To you I say: grow a spine. Find your inner courage. You cannot take money and things with you when you die. So what if you fail financially? So what if you are not a big success? It is better to sleep well. Do the right thing and you will never regret it. Your family will not starve. Your children will respect you. You will be proud to have them follow in your footsteps, not ashamed. I will not have drinks with gutless lawyers.

As to the clueless, and none of my readers by definition fall into that category, but I have a message for you nonetheless: wake up, your days are numbered. There are at least three kinds of clueless lawyers and my attitude towards each is different. The first kind is so full of themselves that they have no idea they are clueless. I will not have drinks with these egomaniacs. The second type has some idea that they may need to learn more about e-discovery. They may be clueless, but they are starting to realize it. I will share drinks with them. Indeed I will try very hard to awaken them from their ethically challenged slumber. The third kind is like the first, except that they know they are clueless and they are proud of it. They brag about not knowing how to use a computer. I will not have drinks with them. Indeed, I will attack them and their stone walls almost as vigorously as the weasels.

Judges Dislike the Clueless, Gutless, and Slimy Weasels

Judges dislike all three kinds of ethically challenged lawyers. That is why I was not surprised by Judge Kemp’s sanction in Brown of both the defendant and their attorneys. (By the way, I know nothing about defense counsel in this case and have no idea which category, if any, they fall into.) Here is how Judge Kemp begins his 47 page opinion.

There may have been a time in the courts of this country when building stone walls in response to discovery requests, hiding both the information sought and even the facts about its existence, was the norm (although never the proper course of action). Those days have passed. Discovery is, under the Federal Rules of Civil Procedure, intended to be a transparent process. Parties may still resist producing information if it is not relevant, or if it is privileged, or if the burden of producing it outweighs its value. But they may not, by directly misrepresenting the facts about what information they have either possession of or access to, shield documents from discovery by (1) stating falsely, and with reckless disregard for the truth, that there are no more documents, responsive or not, to be produced; or (2) that they cannot obtain access to responsive documents even if they wished to do so. Because that is the essence of what occurred during discovery in this case, the Court has an obligation to right that wrong, and will do so in the form of sanctions authorized by Fed. R. Civ. P. 37.

Take these words to heart. Make all of the attorneys in your firm read them. There are probably a few old school types in your firm where you should post the quote on their office wall, no matter which type they are.

Brown v. Tellermate Holdings Ltd.

Judge_KempThe opinion in Brown v. Tellermate Holdings Ltd., No. 2:11-cv-1122 (S.D. Ohio July 1, 2014) (2014 WL 2987051) by U.S. Magistrate Judge Terence Kemp in Columbus, Ohio, makes it very clear that attorneys are obligated to verify what clients tell them about ESI. Bottom line – the court held that defense counsel in this single plaintiff, age discrimination case:

… had an obligation to do more than issue a general directive to their client to preserve documents which may be relevant to the case. Rather, counsel had an affirmative obligation to speak to the key players at [the defendant] so that counsel and client together could identify, preserve, and search the sources of discoverable information.

Id. at pg. 35.

In Brown the defense counsel relied on representations from their client regarding the existence of performance data within a www.salesforce.com database and the client’s ability to print summary reports. The client’s representations were incorrect and, according to the court, had counsel properly scrutinized the client’s representations, they would have uncovered the inaccuracies.

As mentioned, both defendant and its counsel were sanctioned. The defendant was precluded from using any evidence that would tend to show that the plaintiffs were terminated for performance-related reasons. This is a very serious sanction, which is, in some ways, much worse than an adverse inference instruction. In addition, both the defendant and its counsel were ordered to jointly reimburse plaintiffs the fees and costs they incurred in filing and prosecuting multiple motions to compel various forms of discovery. I hope it is a big number.

The essence of the mistake made by defense counsel in Brown was to trust, but not verify. They simply accepted their client’s statements. They failed to do their own due diligence. Defense counsel aggravated their mistake by a series of over aggressive discovery responses and argumentative positions, including such things as over-designation of AEO confidentiality, a document dump, failure to timely log privileged ESI withheld, and refusal to disclose search methods used.

The missteps of defense counsel are outlined in meticulous detail in this 47 page opinion by Judge Terence Kemp. In addition to the great quotes above, I bring the following quotes to your attention. Still, I urge you to read the whole opinion, and more importantly, to remember its lessons the next time a client does not want you to spend the time and money to do your job and verify what the client says. This opinion is a reminder for all of us to exercise our own due diligence and, at the same time, to cooperate in accord with your professional duties. An unsophisticated client might not always appreciate that approach, but, it is in their best interests, and besides, as lawyers and officers of the court, we have no choice.

[when e-discovery is involved] Counsel still have a duty (perhaps even a heightened duty) to cooperate in the discovery process; to be transparent about what information exists, how it is maintained, and whether and how it can be retrieved; and, above all, to exercise sufficient diligence (even when venturing into unfamiliar territory like ESI) to ensure that all representations made to opposing parties and to the Court are truthful and are based upon a reasonable investigation of the facts.

 Id. at Pg. 3.

As this Opinion and Order will explain, Tellermate’s counsel:

– failed to uncover even the most basic information about an electronically-stored database of information (the “salesforce.com” database);

– as a direct result of that failure, took no steps to preserve the integrity of the information in that database;

– failed to learn of the existence of certain documents about a prior age discrimination charge (the “Frank Mecka matter”) until almost a year after they were requested;

– and, as a result of these failures, made statements to opposing counsel and in oral and written submissions to the Court which were false and misleading, and which had the effect of hampering the Browns’ ability to pursue discovery in a timely and cost-efficient manner (as well as the Court’s ability to resolve this case in the same way).

These are serious matters, and the Court does not reach either its factual or its legal conclusions in this case lightly.

Id. at pg. 4.

In addition to the idea that discovery is broad and is designed to permit parties to obtain enough evidence either to prove their claims or disprove the opposing party’s claim, discovery under the Federal Rules of Civil Procedure has been designed to be a collaborative process. As one Court observed,

It cannot seriously be disputed that compliance with the “spirit and purposes” of these discovery rules requires cooperation by counsel to identify and fulfill legitimate discovery needs, yet avoid seeking discovery the cost and burden of which is disproportionally large to what is at stake in the litigation. Counsel cannot “behave responsively” during discovery unless they do both, which requires cooperation rather than contrariety, communication rather than confrontation.

Mancia v. Mayflower Textile Servs. Co., 253 F.R.D. 354, 357-58 (D. Md. 2008). Such a collaborative approach is completely consistent with a lawyer’s duty to represent his or her client zealously. See Ruiz-Bueno v. Scott, 2013 WL 6055402, *4 (S.D. Ohio Nov. 15, 2013). It also reflects a duty owed to the court system and the litigation process.

Id. at pgs. 28-29. Also see: Losey, R. Mancia v. Mayflower Begins a Pilgrimage to the New World of Cooperation, 10 Sedona Conf. J. 377 (2009 Supp.).

Tellermate, as an entity, knew that every statement it made about its control over, and ability to produce, the salesforce.com records was not true when it was made. It had employees who could have said so – including its salesforce.com administrators – had they simply been asked. Its representations were illogical and were directly contradicted by the Browns, who worked for Tellermate, had salesforce.com accounts, and knew that Tellermate could access those accounts and the information in them. And yet Tellermate’s counsel made these untrue statements repeatedly, in emails, letters, briefs, and during informal conferences with the Court, over a period of months, relenting only when the Court decided that it did not believe what they were saying. This type of behavior violated what has been referred to as “the most fundamental responsibility” of those engaged in discovery, which is “to provide honest, truthful answers in the first place and to supplement or correct a previous disclosure when a party learns that its earlier disclosure was incomplete or incorrect.” Lebron v. Powell, 217 F.R.D. 72, 76 (D.D.C. 2003). “The discovery process created by the Federal Rules of Civil Procedure is premised on the belief or, to be more accurate, requirement that parties who engage in it will truthfully answer their opponents’ discovery requests and  consistently correct and supplement their initial responses.” Id. at 78. That did not happen here.

Id. at pg. 31.

But it is not fair to place the entire blame on Tellermate, even if it must shoulder the ultimate responsibility for not telling counsel what, collectively, it knew or should have known to be the truth about its ability to produce the salesforce.com information. As this Court said in Bratka, in the language quoted above at page 3, counsel cannot simply take a client’s representations about such matters at face value. After all, Rule 26(g) requires counsel to sign discovery responses and to certify their accuracy based on “a reasonable inquiry” into the facts. And as Judge Graham (who is, coincidentally, the District Judge presiding over this case as well, and whose views on the obligations of counsel were certainly available to Ms. O’Neil and Mr. Reich), said in Bratka, 164 F.R.D. at 461:

The Court expects that any trial attorney appearing as counsel of record in this Court who receives a request for production of documents in a case such as this will formulate a plan of action which will ensure full and fair compliance with the request. Such a plan would include communicating with the client to identify the persons having responsibility for the matters which are the subject of the discovery request and all employees likely to have been the authors, recipients or custodians of documents falling within the request. The plan should ensure that all such individuals are contacted and interviewed regarding their knowledge of the existence of any documents covered by the discovery request, and should include steps to ensure that all documents within their knowledge are retrieved. All documents received from the client should be reviewed by counsel to see whether they indicate the existence of other documents not retrieved or the existence of other individuals who might have documents, and there should be appropriate follow up. Of course, the details of an appropriate document search will vary, depending upon the circumstances of the particular case, but in the abstract the Court believes these basic procedures should be employed by any careful and conscientious lawyer in every case.

 Id. at pgs. 32-33.

Like any litigation counsel, Tellermate’s counsel had an obligation to do more than issue a general directive to their client to preserve documents which may be relevant to the case. Rather, counsel had an affirmative obligation to speak to the key players at Tellermate so that counsel and client together could identify, preserve, and search the sources of discoverable information. See Cache La Poudre Feeds, LLC v. Land O’ Lakes, Inc., 244 F.R.D. 614, 629 (D. Colo. 2007). In addition, “counsel cannot turn a blind eye to a procedure that he or she should realize will adversely impact” the search for discovery. Id. Once a “litigation hold” is in place, “a party cannot continue a routine procedure that effectively ensures that potentially relevant and readily available information is no longer ‘reasonably accessible’ under Rule 26(b)(2)(B).” Id.

Id. at pg. 35.

As noted above, Tellermate and its counsel also made false representations to opposing counsel and the Court concerning the existence of documents relating to the Frank Mecka matter. Indeed, at the hearing on the pending motions, Tellermate’s counsel stated that she was unaware of the existence of the great majority of the Frank Mecka documents until almost a year after they were requested. Once again, it is not sufficient to send the discovery request to a client and passively accept whatever documents and information that client chooses to produce in response. See Cache La Poudre Feeds, 244 F.R.D. at 629.

 Id. at pg. 37 (emphasis added).

There are two distinct but related problems with trying to remedy Tellermate’s failings concerning these documents. The first is the extremely serious nature of its, and counsel’s, strenuous efforts to resist production of these documents and the strident posture taken with both opposing counsel and the Court. Perhaps the most distressing aspect of the way in which this was litigated is how firmly and repeatedly counsel represented Tellermate’s inability to produce these documents coupled with the complete absence of Tellermate’s compliance with its obligation to give counsel correct information, and counsel’s complete abdication of the responsibilities so well described by this Court in Bratka. At the end of the day, both Tellermate’s and its counsel’s actions were simply inexcusable, and the Court has no difficulty finding that they were either grossly negligent or willful acts, taken in objective bad faith.

Id. at pg. 43.

The only realistic solution to this problem is to preclude Tellermate from using any evidence which would tend to show that the Browns were terminated for performance-related reasons. … This sanction is commensurate with the harm caused by Tellermate’s discovery failures, and is also warranted to deter other similarly-situated litigants from failing to make basic, reasonable inquiries into the truth of representations they make to the Court, and from failing to take precautions to prevent the spoliation of evidence. It serves the main purposes of Rule 37 sanctions, which are to prevent parties from benefitting from their own misconduct, preserving the integrity of the judicial process, and deterring both the present litigants, and other litigants, from engaging in similar behavior.

Id. at pg. 45.

Of course, it is also appropriate to award attorneys’ fees and costs which the Browns have incurred in connection with moving to compel discovery concerning the salesforce.com documents and the Mecka documents, and those fees and expenses incurred in filing and prosecuting the motion for sanctions and the motion relating to the attorneys-eyes-only documents. … Finally, Tellermate and its counsel shall pay, jointly, the Browns’ reasonable attorneys’ fees and costs incurred in the filing and prosecution of those two motions as well as in the filing of any motions to compel discovery relating to the salesforce.com and Frank Mecka documents.

Id. at pgs. 45-46.

So sayeth the Court.


obligatory iPhone Selfie jazzed up with ink strokes effectsThe defendant’s law firm here did a disservice to their clients by not pushing back, and by instead simply accepting their clients’ report on what relevant ESI they had, or did not have. Defense counsel cannot do that. We have a responsibility to supervise discovery, especially complex e-discovery, and be proactive in ESI preservation. This opinion shows what happens when a firm chooses not to be diligent. The client loses and the lawyers are sanctioned.

Our obligation as attorneys of record does not end with the client’s sending a litigation hold notice. If a client tells us something regarding the existence, or more pointedly, the non-existence, of electronically stored information that does not make sense, or seemingly is contradicted by other evidence, it is critical for an attorney to investigate further. The client may not want you to do that, but it is in the client’s best interests that you do so. The case could depend upon it. So could your license to practice law, not to mention your reputation as a professional. It is never worth it. It is far better to sleep well at night with a clear conscience, even if it sometimes means you lose a client, or are generally not as successful, or rich, as the few ethically challenged lawyers who appear to get away with it.

My Basic Plan for Document Reviews: The “Bottom Line Driven” Approach – Part One

September 29, 2013

Editors Note: This is a complete rewrite of earlier descriptions of Ralph Losey’s bottom line driven review method.

Losey_JLsign_2013_abaI have been focusing on the problem of high e-discovery costs since 2006. At that time I phased out my general trial practice and devoted all of my professional time to electronic discovery law. I focused on the expenses associated with those legal services because it was obvious in 2006 that unpredictable, high e-discovery costs were a core problem in civil litigation. They still are. Uncertain costs keep many attorneys away from e-discovery, even though nearly all original records and documents are electronic, and have been for many years.

The most expensive part of e-discovery is the document search and review process. In most projects it constitutes between 60% to 80% of the total cost. See Where The Money Goes: Understanding Litigant Expenditures for Producing Electronic Discovery (corporate survey found an average of 73%).[1] For that reason, although I practice in all areas of electronic discovery law, my efforts to control costs have focused on document review.[2]

Two Different Review Tasks

The review costs in turn arise primarily from two legal activities:[3]

  1. Search for and identification of the likely responsive or relevant documents. (For convenience and simplicity purposes this paper will refer only to relevance henceforth, and not responsiveness, although the author recognizes there can be differences.) This is a binary decision, yes or no as to relevance. This type of review is often called first pass review.[4]
  2. Study of the documents identified as likely relevant to determine which must be withheld, logged, redacted, and/or labeled to protect a client’s confidential information, such as privileged communications. The subsequent reviews can also include specific issue tagging work unrelated to confidentiality concerns. Documents not identified as relevant are not included in these further reviews, but may be subject to sampling for quality assurance purposes.[5]

The second reviews for client confidentiality purposes can be very problematic, expensive, and risk-filled.[6] For instance in Tampa Bay Water v. HDR Engineering, Inc., a large construction case involving millions of documents reviewed for possible production, both sides inadvertently produced thousands of privileged documents to each other.[7] They did so despite expenditures of tens of millions of dollars for traditional attorney review of each document before production.

My analysis and experiments with cost controls since 2006 have focused on both the cost of the initial relevancy review, and the cost of the final protection reviews. Great progress has been made in the last several years in lowering the cost of first-pass relevancy reviews, especially when using artificial intelligence (“AI”) enhanced software. Improvements have also been made in the second review costs, but not nearly as dramatic. Although some advocate for the elimination of second pass review to save expenses, and reliance on confidentiality and clawback agreements only for protection of confidential client documents, most litigants today are unwilling to take the risks involved.

Secret Shh!At the present time, in most cases, virtually no corporate clients are willing to dispense with final manual review of documents selected for production and rely solely on automated software for protections. The likelihood of error is simply still too high for this to be an acceptable risk in most cases for most clients. The damage caused by disclosure of some privileged communications cannot be fully repaired by clawback agreements.[8]

As I explained in my series Secrets of Search, Parts OneTwo and Three, the latest AI enhanced software is far better than keyword search, but not yet good enough to allow for a fully automated approach to protection review.[9] Based on my informal surveys and discussions with attorneys around the country, I have found that confidentiality reviews are only omitted in certain non-litigation circumstances, such as when making corporate merger related productions to the government, or in cases where the data under review is very unlikely to contain confidential information, such as old data of an acquired company. Also, I have seen it done in bankruptcy cases, or by litigants in any type of case who otherwise simply could not afford to respond properly to discovery requests.

Although AI enhanced review is not good enough, yet, to rely on exclusively for protection review, it is certainly up to the task of first pass relevancy review.[10] Attorneys should also use AI enhanced search to speed up the second pass manual review for protections.

Of course, it is the litigant’s data and their confidential information, so if a litigant (or third party responding to a subpoena), really does not care about disclosure of confidential information in any particular data set, and is not required by law to protect the confidential information, and if they want to rely on claw back orders and confidentiality agreements alone, then that is their right. They may instruct their attorneys to skip this step for cost saving purposes. If you are an attorney receiving such an instruction, I recommend that you confirm that instruction in writing. You should also provide a full, detailed, written disclosure of the risks involved. Make sure the instruction is based on the client’s full understanding that once a bell has been rung, it cannot be un-rung, and that, for instance, waiver of once privileged attorney-client communications may open the door to waiver of others.

The Idea of Bottom Line Driven Review

After two years of analysis of the review cost problem I came up with an idea in 2008 that looked promising. It is simple in concept, which is one of its strengths  (although its implementation can sometimes be complex). I have since tested and refined this method in two law firms with multiple types of cases and investigations. I have also spoken about this approach with many other attorneys, judges, and law professors, and taught this method at multiple CLE events around the country.[11]  I call it Bottom Line Driven Proportional Review and Production. A more technical description for it, the one I used in a legal methods patent application, is: System and Method for Establishing, Managing, and Controlling the Time, Cost, and Quality of Information Retrieval and Production in Electronic Discovery. But I usually just call it Bottom Line Driven Review.

The Bottom Line of Productions

The bottom line in e-discovery production is what it costs. Believe me fellow lawyers, clients care about that …. a lot! In Bottom Line Driven Proportional Review everything starts with the bottom line. What is the production going to cost? Despite what some lawyers and vendors may tell you, it is not an impossible question to answer. It takes an experienced lawyer’s skill to answer, but after a while, you can get quite good at such estimation. It is basically a matter of man-hours estimation. With my method it becomes a reliable art that you can count on. It may never be exact, but the ranges can usually be predicted, subject of course to the target changing after the estimate is given. If the complaint is amended, or different evidence becomes relevant, then a change order may be required for the new specifications.

Construction EstimatingPrice estimation is second nature to me, and an obvious thing to do before you begin work on any big project. I think that is primarily because I worked as a construction estimator out of college to save up money for law school back in the seventies. Estimating legal review costs is basically the same thing, projecting materials and labor costs. In construction you come up with prices per square foot. In e-discovery you estimate prices per file, as I will explain in detail in this essay.

My new strategy and methodology is based on the bottom line. It is based on projected review costs, defensible culling, and best practices of AI enhanced review. Under this method the producing party determines the number of documents to be subjected to costly reviews by calculating backwards from the bottom line of what they are willing, or required, to pay for the production.

Setting a Budget Proportional to the Case

The process begins by the producing party calculating the maximum amount of money appropriate to spend on the production. A budget. This requires not only an understanding of the production requests, but also a careful evaluation of the value and merits of the case. This is where the all important proportionality element comes in.

The amount selected for the budget should be proportional to the monies and issues in the case. Any more than that is unduly burdensome and prohibited under Rule 26(b)(2)(C), Federal Rules of Civil Procedure and other rules that underlie what is now generally known as the Proportionality Principle.[12]

The budget becomes the bottom line that drives the review and keeps the costs proportional. The producing party seeks to keep the total costs within that budget. The budget should either be by agreement of the parties, or at least without objection, or by court order.

The failure to estimate and project future costs, and to plan and limit reviews so that they stay within budget, accounts for much of today’s out of control e-discovery costs. Once you spend the money, it is very hard to have costs shifted to the requesting party. But if you raise objections and argue proportionality before the spend, then you will have a fair chance to constrain your expenses within a reasonable budget.

Under the Bottom Line Driven proportional approach, after analysis of the case merits, and determination of the maximum expense for production proportional to a case, the responding party makes a good faith estimate of the likely maximum number of documents that can be reviewed within that budget. The document count represents the number of documents that can be reviewed for final decisions of relevance, confidentiality, privilege and other issues, and still remain within budget. The review costs you estimate must be based on best practices and be accurate (no puffing).

Following best practices the producing party then uses advanced search techniques and quality controls to find the documents in a first pass review that are most likely to be relevant and stay within the number of documents allowed by the budget. Since predictive coding type AI enhanced software ranks all documents according to probable probative value, it the perfect tool to facilitate bottom line driven review.[13] The ranking feature makes it far easier to focus on the most important documents and stay within budget.

Good predictive coding software today evaluates the strength of the relevance and irrelevance of every document in the data set analyzed. That is one reason I was especially pleased when AI type software with reliable ranking abilities first came into the market in 2011 and have since started specializing in the best methods for use of this software. Bottom line driven review was, and still can be, done without predictive coding ranking (I did so for years), but it is harder to be accurate without computerized ranking.

Using best methods and AI search with relevancy ranking allows you to get the most bang for your buck, the core truth. This in turn helps persuade the requesting party (or the court, should agreement not be reached), to go along with your proposed budget constraints.

Unfortunately, the use of AI software comes with its own transactional costs, which means it cannot be economically used in cases that are too “small.” Typically this means cases involving less than a $25,000 budget for document review. For these smaller cases the same bottom line approach should still be used, and it can still work fairly well, even if you do not have the benefit of expensive AI software and its ranking properties.

To Be Continued …..

[1] Report can be found online at http://www.rand.org/pubs/monographs/MG1208.html

[2] There are essentially ten tasks that lawyers perform in e-discovery, three of which pertain to document review. They are described in the Electronic Discovery Best Practices found at EDBP.com. The three types of services pertaining to document review can be found at: http://www.edbp.com/search-review/. The functions performed by electronic discovery vendors, which includes non-legal services such as data processing, are outlined in the Electronic Discovery Reference Model found at EDRM.net.

[3] For an example of this industry standard two-step practice see Gabriel Techs., Corp. v. Qualcomm, Inc., No. 08CV1992 AJB (MDD), 2013 WL 410103 at *10 (S.D. Cal. Feb. 1, 2013) (cost award allowed to prevailing party of $2,829,349.10 for first-pass review by SMEs of one million documents and another $391,928.91 for a second review by contract lawyers.)

[4] It is included in the EDBP as step seven and described as Computer Assisted Review (CAR) found at: http://www.edbp.com/search-review/computer-assisted-review/.

[5] It is included in the EDBP as step eight and described as Protections found at: http://www.edbp.com/search-review/.

[6] Mt. Hawley Ins. Co. v. Felman Production, Inc., 2010 WL 1990555 (S.D. W. Va. May 18, 2010) (privilege documents accidentally produced resulting in waiver of privilege in spite of sophisticated counsel employing elaborate safeguards). Also see  Diabetes Centers of America, Inc. v. Healthpia America, Inc.2008 U.S. Dist. LEXIS 8362, 2008 WL 336382 (S.D. Tex. Feb. 5, 2008) (production errors made by both sides); Danis v. USN Communications, Inc., 2000 WL 1694325 (N.D. Ill. 2000) ($10,000 fine imposed against CEO personally when the young general counsel he hired to supervise e-discovery was grossly negligent);

[7] Tampa Bay Water v. HDR Engineering, Inc. Case No. 8:08-CV-2446-T-27TBM. (M.D. Fl. November 2, 2012) (also found at 2012 U.S. Dist. LEXIS 157631 and 2012 WL 5387830). The plaintiff alone inadvertently produced 23,000 privileged documents. The prevailing defendant in this case was awarded over twenty million dollars in fees and costs. Of this sum $3,100,000 was awarded as a cost for e-discovery vendor processing and hosting of 2.7 million documents for review. Another $4,590,000 ($1.70 per file) is estimated to have been spent by one defendant in attorney fees to review the documents. See Losey, R., $3.1 Million e-Discovery Vendor Fee Was Reasonable in a $30 Million Case (e-Discovery Team, Aug. 4, 2013) found at https://e-discoveryteam.com/2013/08/04/3-1-million-e-discovery-vendor-fee-was-reasonable-in-a-30-million-case/#comment-60139.

[8] See: FN 4. Also see: Brookfield Asset ManagementIncv. AIG Financial Products Corp., 2013 WL 142503 (S.D.N.Y. Jan. 7, 2013); Losey, R., Another Clawback Enforcement Order Shows the Importance of the Selection of Quality Vendors found at https://e-discoveryteam.com/2013/03/12/another-clawback-enforcement-order-shows-the-importance-of-the-selection-of-quality-vendors/

[9] The three part essay on Search is available online in one document found at: https://ralphlosey.files.wordpress.com/2013/03/secrets_of_search_2012_consolidated.pdf

[10] For a description of what I mean by AI enhanced search, which is also commonly called Predictive Coding, Technology Assisted Review (TAR), or Computer Assisted Review (CAR) see my page describing CAR found at https://e-discoveryteam.com/car/Also see the descriptions for step seven in the EDBP at http://www.edbp.com/search-review/.

[11] I am going to explain the idea here with enough detail for attorneys experienced in e-discovery to be able to try it out. I urge you to do so. I have been working and training the attorneys in my current law firm, Jackson Lewis, in this for years. We know that it works in all types of employment law cases, federal and state, large and small, especially when coupled with the doctrine of proportionality (also explained in this essay). In my prior law firm, Akerman Senterfitt, the method was tested and refined in multiple types of commercial litigation. Time and conflict checks permitting, I can consult and assist attorneys outside of my firm on Bottom Line Driven Review, especially when it involves the use of artificial intelligence enhanced software (often called predictive coding) to search for evidence in big data. That is my current area of special interest and Bottom Line Driven Review is particularly effective in large cases.

[12] See Rule 1, Rule 26(b)(2)(C), Rule 26(b)(2)(B), and Rule 26(g), Federal Rules of Civil ProcedureCommentary on Proportionality in Electronic Discovery, 11 SEDONA CONF. J. 289 (2010); Carroll, Proportionality in Discovery: A Cautionary Tale, 32 Campbell L. Rev. 455, 460 (2010); Losey, R. Good, Better, Best: a Tale of Three Proportionality Cases – Part Two found at https://e-discoveryteam.com/2012/04/15/good-better-best-a-tale-of-three-proportionality-cases-part-two/ Also seeTamburo v. Dworkin, 2010 WL 4867346 (N.D. Ill. Nov. 17, 2010); Rimkus Consulting Group v. Cammarata, 688 F.Supp. 2d 598, 613 (S.D. Tx. 2010); Apple v.Samsung, 2013 WL 442365412 (N.D.Cal. August 14, 2013); Wood v. Capital One Services, LLC, No. 5:09-CV-1445 (NPM/DEP), 2011 WL 2154279, at *1-3, *7 (N.D.N.Y, 2011); Daugherty v. Murphy, No. 1:06-cv-0878-SEB-DML, 2010 WL 4877720, at *5 (S.D. Ind., 2010); Willnerd v. Sybase, 2010 U.S. Dist. LEXIS 121658 (SD Id., 2010); I-Med Pharma Inc. v. Biomatrix, 2011 WL 6140658 (D.N.J. Dec. 9, 2011); U.S. ex rel McBride v. Halliburton Co.,, 272 F.R.D. 235 (D.D.C. 2011); DCG Sys., Inc. v. Checkpoint Techs, LLC, 2011 WL 5244356 (N.D. Cal. Nov. 2, 2011).

[13] Losey, R., Relevancy Ranking is the Key Feature of Predictive Coding Software found at https://e-discoveryteam.com/2013/08/25/relevancy-ranking-is-the-key-feature-of-predictive-coding-software/.

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